[guided]Fix an integer $n \ge 0$. The goal is to estimate the unknown error $d(x_n,x^*)$ using a computable quantity involving iterates. The only available computable displacement near $x_n$ is the step size $d(x_{n+1},x_n)$, so we insert $x_{n+1}$ between $x_n$ and $x^*$ by the triangle inequality: $d(x_n,x^*) \le d(x_n,x_{n+1}) + d(x_{n+1},x^*)$.
Now we use the iteration rule and the fixed point property. By definition of the sequence, $x_{n+1}=f(x_n)$. Since $x^*$ is a fixed point, $x^*=f(x^*)$. Therefore the second term can be rewritten as $d(x_{n+1},x^*) = d(f(x_n),f(x^*))$. The contraction hypothesis applies to every pair of points in $X$, so it applies to the pair $(x_n,x^*)$ and gives $d(f(x_n),f(x^*)) \le c\,d(x_n,x^*)$. Combining these two facts gives $d(x_{n+1},x^*) \le c\,d(x_n,x^*)$.
Substituting this back into the triangle inequality produces
\begin{align*}
d(x_n,x^*) \le d(x_n,x_{n+1}) + c\,d(x_n,x^*)
\end{align*}
We now move the term $c\,d(x_n,x^*)$ to the left:
\begin{align*}
(1-c)d(x_n,x^*) \le d(x_n,x_{n+1})
\end{align*}
Because $c \in [0,1)$, the number $1-c$ is strictly positive, so division by $1-c$ preserves the inequality. Hence
\begin{align*}
d(x_n,x^*) \le \frac{1}{1-c}\,d(x_{n+1},x_n)
\end{align*}
This is the basic error bound: the current error is controlled by the next step size.[/guided]